Wednesday, October 29, 2008

Why I've Been Negative on McCain

Not an excuse. But, a reason. My posts on John McCain being a redistributor and socialist are in response to these attacks on Barack Obama (see video below). I'm not saying McCain is bad for wanting to spread the wealth around. Nor is Sarah Palin bad for spreading the wealth around Alaska. To the contrary. I think it's a good thing. But, they are both accusing Obama of being something sinister for proposing things they have both supported- progressive income tax, refundable tax credits and "sharing the wealth".

And Alaska—we’re set up, unlike other states in the union, where it’s collectively Alaskans own the resources. So we share in the wealth when the development of these resources occurs. … It’s to maximize benefits for Alaskans, not an individual company, not some multinational somewhere, but for Alaskans.

10 comments:

Brian - I think there is a difference - oil is a natural resource that is collectively ours. The sweat and labor to earn a living for me and my family is not. Yes, I understand that the progressive tax system has been in place for a long time. The distinction is between who and why.

The oil is in the ground. It's worthless until it's brought to the surface and processed. The oil companies buy the rights to drill, take the risk, process the oil and turn it into something of value. The shareholders fund this. The profits earned by the oil company belong to the shareholders every bit as much as the paycheck given to your employer belongs to you.

Let me make an extreme example to make my point. If we took all the profits of the companies and divided them up among non-shareholders, what do you think would happen to companies? Would they continue to produce?

Taking profits from companies and giving those profits to people who have not participated in the risk and the expense (shareholders) of producing those profits is every bit as socialistic as taxing you to benefit someone else. I'm not saying either is wrong. Just that they are, in essence, the same.

And, BTW, in case this point is still lost on some, the income tax is a redistribution of wealth now (in the strictest sense of the word). We all pay for things we don't use. The differnce between Obama's plan and McCain's plan is Obama wants to take a little more from the very rich and give more relief to the middle class and the poor. McCain wants to give less to the middle class and the poor and give MORE relief to the rich. Both are redistributions of wealth, if you want to look at it that way. So, do you want to redistribute the wealth to the middle class and the poor (95% of the country) or to the very rich? The answer is clear to me. I cannot for the life of me figure out why people who are making less than $250,000 a year are so concerned about people making more than $250,000/year and corporations paying a slightly higher tax rate so that we can get our economy back on track. Yet, those same people support giving smaller tax breaks to the poor and middle class so that the very rich can have even larger tax breaks. If McCain's plan were to hold the line on the rich tax brackets, I could maybe understand why you would prefer it over Obama's.

Thanks for the response - will Brian, we'll never agree - taking more from the wealthy is just plain wrong. We should all pay our fair share and if I worked hard and took all the chances, and busted my tail off, and now you want more from me because I'm advantaged? PLEASE!!!!

No disrespect intended - but I gotta say that there's a general tone throughout your blogs (which I really enjoy BTW!!!) about the rich - I don't know why, but you seem to have quite a beef with them, and Obama's tax plan perhaps reflects for you a certain sense of justice done...

The economic proposals by both are just words anyway - getting them passed is another battle - both barely scratch the surface of the issue - the American people will fix it - they always do.

I'm sitting here just laughing at your perception of my perception of the rich. I wish you knew me personally.

First of all, I'm a money-grubbing buy. Always have been. I've always dreamed of being rich and worked my tail off to get there. I went into sales after getting my degree in engineering because sales guys make more money. A few years back I quit my sales job and started working full time for myself. I own my own company.

By many people's standards, I am rich, Tony. Not to brag, but I'm pretty close to the point where Obama's tax plans would cost me MORE money. If the economy gets back on track, I should be there in just a few years. And, unlike Joe the Plumber, I'll be glad to pay a little more when I get there, if it helps out someone else.

No, Tony, I have no beef with the rich. I daresay, Obama doesn't either given that he is rich. Warren Buffett also said he thinks our current tax system is shameful because he pays a lower tax rate than many of his employees. Do you think he has a beef with the rich?

I think the common theme you see in my blog is taking care of the poor. And, yes, I do think enough is enough. Personally, I think once a person has more money than they can possibly spend in a lifetime, it's probably time to start giving some of it back. $250,000 a year isn't a huge gob of money. But, $10 or $20 or $30 million a year is.

Tony, if you're making more than $250,000 a year and you are not willing to pay 3% more on the marginal income over $250,000 to help out a family that can barely afford food, well, yes, I do have a little bit of a problem with that. But, I have no problem with hard work, success and people enjoying the fruits of their labor.

I notice that you (and others) continue to just gloss over my assertion that McCain's tax proposal is also a redistribution of wealth in the WRONG DIRECTION. Talk about paying your fair share. He wants to give a $300 tax break to a family making $40,000 a year but a $700,000 tax break to a CEO. You don't see that as a problem? I see a lot of "sympathy" for people making over $250,000 a year and a lot of disregard for families making less than $50,000 a year who are getting slammed by disproportionately high taxes. I'm frankly just amazed by that.

Brian - Financially, I'm in the same boat as you. Was a software engineer and went to sales for the same reason! Now I am self-employed as well. I personally have, and most of the folks I know, have a huge heart for the poor and give until it actually hurts at times. I don't want government mandating it and messing with brackets based on income. It's plain and simple to me. The wealthy folks that I know give HUGE amounts of their earnings to the poor - voluntarily.I don't have the answer, and neither does Obama or McCain.

Good to learn both those things about you. But, as far as messing with the tax brackets, too late my friend. The tax brackets have already been messed with. They were lowered for the very rich in an effort to stimulate the economy. Obama simply wants to put them back where they were.

Do some research on the top tax brackets. I posted it here earlier. Progressive income tax is new and neither McCain nor Obama wants to do away with it. Personally, I'd rather see a consumption tax (national sales tax). I think it'd be simpler, less prone to cheating and more fair. But, that's neither here nor there. We have to choose between McCain and Obama. More tax breaks for the wealthy or bigger tax breaks for the middle class. Those are your choices.

I also wholeheartedly agree that I would LOVE to see the government out of mandating what we have to give to take care of the poor. All we have to do is lift up the private sector safety net above the safety net the government provides and voila, we can put the government out of that business.

I think you'll find the effective tax rate on the uber-rich and corporations is much lower than most people think. Corporations are only taxed on their "bottom line". There are many ways to reinvest money back into the corporation and avoid paying taxes right away. So, as a corporation, if I buy more inventory, hire more workers, buy a new piece of equipment, do more R&D, all of that stuff reduces my bottom line and what I pay in taxes. So, while a corporation (or an individual) may pay a high marginal tax rate on the dollars they finally declare as income, many pay next to zero because they simply keep deferring what they claim as income. Google "how many corporations pay no tax" and be prepared to be shocked.